Tag Archives: British economy

As the Government’s Help to Buy scheme takes off and the economy grows stronger, house prices will increase across the UK by 7% next year and 5% in 2015. The improving economy is expected to transform the country’s property market. Average prices in London will jump by £76 each day in 2014 but every region will enjoy a rate of growth last seen before the financial crisis, according to a new report by Knight Frank.

Many first-time buyers feel that buying in London is a struggle and that half the battle is finding out what help is available. Recently it was found that third of wannabe homeowners have lost all hope of buying according to L&Q’s housing association. A study of 2,000 under 35’s revealed that despite government help, up to 70% of those who have been saving had given up and blow the cash on holidays, cars or even to pay bills as the state of the market and the recession eliminated their property plans. In London for instance, prices have risen and it is difficult for a vast majority to find affordable accommodation, which has meant shared accommodation has become an option for many people. Shared ownership is said to be a flexible and affordable route – it was originally launched to help low-paid workers buy affordable homes but the part-buy part-rent scheme is now mainstream.

Canary Wharf is getting ready to welcome a 74-floor skyscraper. The tower will be Europe’s tallest purely residential building. Ryan Corporation U.K. Ltd. paid 100 million pounds ($160 million) for the site of the proposed skyscraper, the closely held company said yesterday in an e-mailed statement. The 242-meter (794-foot) high tower would be the tallest in London’s second-largest financial district and the apartments would have a total value of more than 1 billion pounds when it opens in 2018.

Personal Finance

Families could be about to celebrate a drop in the cost of their weekly food shop as Asda fired the opening shots in a new supermarket price war. The company will knock £1 billion off prices over the next five years it said yesterday and accused rivals of ‘gimmicks’ in offering customers vouchers while boosting prices.

Rising energy bills are said to be killing off British poinsettia plants. It is thought the Christmas staple red pot plant will be in short supply this year with growers hit by rising energy costs. For millions of families the plant is as important at Christmas time as the turkey or Christmas tree. But sadly there may be disappointment as the plant is getting increasingly more expensive to heat, as they need carefully controlled temperatures of between 59F to 68F – and unfortunately soaring fuel bills have driven some growers out of business.

Economy

News of a slowdown in the Eurozone has created a somewhat a bleak outlook, and has reduced people’s hopes of a rebound as suggested earlier in the year as Europe’s two largest economies stumbled in the second quarter – Germany and France. By contrast, the British economy grew 0.8% in the third quarter this year, it’s most significant level of growth since 2010. The UK economy could reach what the Bank of England officials have referred to as ‘escape velocity’ sooner than until recently expected. The banks Monetary Policy Committee also warned that a global slowdown posed the greatest threat to the recovery. And reports today that disappointing growth figures in the Eurozone and Japan driven by weak export numbers have dashed hopes that a global economic recovery would gather pace in the year’s second half.

Britain’s economy is outpacing all its main competitors including America, according to combined data from Markit and JP Morgan. Britain’s economy is growing at an annualised rate of 2.4%, compared to 1.7% annual growth in the USA and an on-going recession in the Eurozone. Many economists are now upgrading their forecasts for this year and next. “This recovery is broad, and the broader it is, the more sustainable it is”, says Rob Dobson, senior economist at Markit. (Sunday Times p.2)

Personal Finance / Property

With official interest rates at record lows, and now set to remain so until an improving economy brings the unemployment below 7%, savers are bracing themselves for what could be a three more years of a 0.5% base rate. If interest rates did rise in 2016, in total that would mean a seven year wait for higher returns. Sunday Times Money has a full feature on what impact below-inflation returns could mean for savers, focusing on the move into property investments, and the rise of Buy-to-Let borrowing to leverage these deals. Buy-to-Let house purchases are expected to hit 85,000 this year and 100,000 in 2014, fuelled by strong rental yields, currently averaging 5.3% according to the LSL Buy-to-Let Index.

David Whittaker of Mortgages for Business said, “In the last couple of days we have seen a surge in calls for savers looking for advice on getting into the buy-to-let market. Clients want a better return ion savings than they would get by sticking their savings in the bank.” (Sunday Times Money p.1)

Recruitment

Unemployment could fall to a new low in this week’s jobless figures. According to IHS Global Insight the official figures on Wednesday will show a fall in unemployment of 38,000 to a 25 month low of 2.48 million. They also expect a rise in employment levels – predicting 52,000 more people in work to take the total number of people employed in the UK to 29.8 million. (Sunday Express Financial p.1) Tara Ricks, managing director of Randstad Financial and Professional, says “the jobs market is humming” and that this will help “stoke the fires of the economy”. In his column, the Express’s Geoff Ho is more cautiously optimistic saying we should still “keep the champagne on ice” for the time being, highlighting youth unemployment, which is still stubbornly high.